Trump will offer car manufacturers some relief in their 25% tariffs

Washington (AP) – President Donald Trump signed the executive orders on Tuesday to relax some of his 25% tariffs in cars and auto parts, said the White House, a significant reversal since import taxes threatened to harm national manufacturers.

Automobile manufacturers and independent analyzes have indicated that tariffs could increase prices, reduce sales and make US production less competitive worldwide. Trump portrayed the changes as a bridge to car manufacturers that move more production to the United States.

“We only wanted to help you during this small transition, in the short term,” Trump told reporters. “We didn’t want to penalize them.”

The secretary of the Treasury, Scott Besent, who spoke before at a White House conference on Tuesday, said the goal was to allow car manufacturers to create more domestic manufacturing jobs.

“President Trump has had meetings with producers of national and foreign cars, and has committed to bring the production of cars to the United States back,” Besent said. “Therefore, we want to give car manufacturers a way to do that, quickly, efficiently and create as many jobs as possible.”

Via News

Trump signed an order on Tuesday that modified his previous automotive rates of 25%, which facilitated vehicles that are assembled in the US. UU. With foreign parts not to face prohibitive import taxes.

The amended order provides a reimbursement for a year of 3.75% in relation to the sales prices of a vehicle gathered nationwide. That figure was reached by placing the 25% import tax in the parts that represent 15% of the sale price of a vehicle. For the second year, the refund would be equivalent to 2.5% of the sale price of a vehicle, since it would apply to a lower participation of the vehicle parts.

An official of the Senior Trade Department, insisted on anonymity to obtain a preview of the order in a call with journalists, said that car manufacturers told Trump that the additional time would allow them to increase the construction of new factories, after car manufacturers warned that they would take time to change their supply chains. The official said that car manufacturers during the next month would announce additional shifts for workers, new hiring and plans for new facilities.

The president of Stellantis, John Elkann, said in a statement that the company appreciates the president’s tariff assistance.

“While we further evaluate the impact of tariff policies on our American operations, we expect our continuous collaboration with the US administration to strengthen a competitive US automotive industry and stimulate exports,” he said.

The CEO of General Motors, Mary Barra, said the car manufacturer is grateful for Trump’s support to the industry, and pointed out that the company expects conversations with the president and working with the administration.

“We believe that the president’s leadership is helping to level the playing field for companies such as GM and allow us to invest even more in the economy of the United States,” Barra said in a statement.

Jim Farley, president and CEO of Ford Motor Company, emphasized that his company does more than his peers to manufacture nationwide.

“We will continue to work closely with the administration in support of the president’s vision for a healthy and growing automotive industry in the United States,” Farley said. “As the correct policies are implemented, it will be important that the main vehicle importers coincide with Ford’s commitment to construction in the United States. If each company that sells vehicles in the US. UU. It combined the US manufacturing relationship of Ford, 4 million more vehicles would meet in the United States each year.”

But changing the management does not help an industry that thrives with stability, said Sam Fioresi, an analyst at the Autoforecast Solutions business forecast company.

“Finding a way to recover the automotive industry has to be essential in this,” said Fioresi. “The tariffs have not seen this industry, the way it works, and they hope that production can jump and relocate the blossom of an eye. It simply does not work that way.

“Making a change in production for vehicle manufacturing has been a minimum, months and generally years, along with hundreds of millions, if not billions of dollars,” he added. “And it is not something that they take light.”

The Wall Street Journal first reported the details of the actions. The White House quick response account in X said Trump signed a second order on Tuesday afternoon to prevent their various rates from stacking in addition to their existing taxes in imported cars and auto parts.

New vehicles were sold to $ 47,462 on average last month, according to the Kelley Blue Book automatic purchase resource. Tariffs emphasize the automotive supply chain, a complex network that covers the world. North America borders are not only found many times before being assembled in a finished vehicle, car manufacturers depend on suppliers around the world for thousands of components.

The increase in levies would certainly cost new car buyers, sensitive to inflation, more, take them to the used vehicle market and quickly strive for the availability of used cars. Tariffs also affect the cost of possessing and maintaining a vehicle.

The modifications occur when Trump marks 100 days in the White House when going to Michigan, a state defined by the manufacture of cars. Trump won the State in last year’s elections promising to increase factory work.

Even so, it is not clear what impact will have the widest Trump tariffs on the economy and car sales in the United States. Most economists say that rates, which could ultimately reach most imports, increase prices and slow down economic growth, possibly harming car sales despite the relief that administration intends to offer in its previous policies.

___

San Juan contributed from Detroit.